Amidst the impressive performance of the US stock market in the past two years, a huge blow that is the current government shutdown is once again shaking the stock market. Overall, the shutdown recorded more or less 24 billion worth of losses to the US economy.
The shutdown may be over, but its impact on private firms, including their stocks investors will surely be felt starting the last quarter of the year, until the first quarter of 2014. This is a projection shared by most of the leading companies in terms of sales stocks value including WalMart and Ebay. Fortunately for these bigger companies, bouncing back from the impacts of shutdown is still very likely.
Another industry that has been severely affected, and may find it more difficult to bounce back are the small businesses, which do not have sufficient resources to recover from their losses during the almost month-long government shutdown. So, how exactly do these private sector qualms affect your own stocks investment? Simply put, as the stock prices of the company goes down, your investment may also be reduced by almost a quarter by now. This is one of the risks of the stock market as an investment arena. As they say, “if it’s good, it’s really good.”
While it is still not confirmed how low the stock prices of companies and Wal Mart and Ebay went after the shutdown, the company executives themselves are already anticipating a certain decline in their stock prices.
On the brighter side, investment managers and stock analysts are also open the window of opportunity to buy more stocks that are currently in their lowest pricing as a result of the government shutdown. This smart move may even eventually complement the loss from the already invested stocks.
The losses from the shutdown may be inevitable, but a keen investor will always find a way to take advantage of any economic plunge to buy cheaper stocks. Now, instead of being wary of your losses, it’s time to actually think of a new strategy on how to make the most out of the economic state of the country.